Theresa May's surprise decision to call a snap general election dominated the news headlines in April, and that undoubtedly had an impact on buyer confidence.
A total of 111 property auctions were held across the UK in April, 28 fewer than in same month last year, so it is perhaps unsurprising to see falls in both lots offered and lots sold - down 9.5% and 8.6% respectively.
The amount raised also decreased by 11.3%, from £242m in April 2016 to £215m in April this year, according to data from the Essential Information Group (EIG).
The residential auction market saw falls of around 10% in lots offered and lots sold, with similar double-digit falls also evident in the rolling quarterly figures.
“This decline in activity reflects what has been seen in the wider estate agency and lettings market, and with the current uncertainty surrounding the general election and Brexit, may continue in the immediate future,” said David Sandeman, managing director at EIG.
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The company’s third auction of the year in London comprised a catalogue of 201 lots, with sales on the day and pre-auction sales totalling some £27.3m, which was the highest capital value for the company for almost a year.
The entire auction was filmed by BBC’s Homes under the Hammer and several lots featured in this auction will be aired in the next series of the show.
A boarded up house on Bathurst Gardens in Kensal Rise, NW10, in need of modernisation, was one of the star lots of the day, having received an unprecedented level of interest. The property was guided at £500,000 and despite pre-auction offers at £700,000 the executors held their nerve, with the final winning bid at £990,000.
Three lots offered on behalf of The London Borough of Wandsworth also proved popular, and collectively achieved sales totalling £1.74m, some 34% above the £1.3bn guide prices.
Chris Glenn, divisional managing director of Sequence, said: “We noted a clear resurgence of activity for lots based in Greater London and with standing room only available for the early sector of the catalogue. The start of the auction set the tone for the rest of the day.”
Salford’s A J Bell Stadium in Salford played host to Edward Mellor’s April sale, which saw 50 of the 62 lots on offer sold under the hammer, with sales totalling just over £5.5m – the highest total for the company for a decade.
There was a notable rise in the number of properties featured in the catalogue compared with Edward Mellor’s previous sale, six weeks earlier, thanks in part to the company’s decision to introduce a new promotion whereby fees are waived for sellers whose properties fail to sell.
The auction featured interesting properties from across Manchester, Stockport, Bolton, Wigan, Preston, Oldham, Burnley, Merseyside, Cheshire and North Wales,
Nick Green, Edward Mellor’s co-auctioneer, commented: “We had 76% of lots at our April auction going for above the guide price and the upward trend is patently clear. Auctions are a viable way of selling your property quickly and effectively without the hassle associated with the open market.
“We’ve witnessed an 11% increase in the number of properties across the North West region coming to auction over the past 12 months with a growing number of property sellers surprised by how much they can get over and above the guide price. But it’s a nice surprise!
“By waiving the fees for sellers whose properties fail to sell we are taking away the risks associated with going to auction.
Activity levels in the residential property sector continued to perform well across the UK despite the political uncertainty in the run-up to the general election.
The number of lots offered was up almost 5% to 2,560, while the volume of lots sold increased by almost 10% to 1,945. The amount realised from residential sales totalled £338m, up £27m, or 8.9%, from the £311m raised in May 2016.
The rolling quarterly figures provided by EIG, which had shown double-digit falls in April, now show only marginal falls in lots offered and sold and positive growth in both the sale rate - up 1.6% to 75%, while the amount raised as up 0.6% to £808m.
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While many buyers continue to snap up residential properties across the country, Allsop’s sale in May suggested that most people would mainly only commit to deals that they perceive to offer good value for money.
Following on from a successful commercial auction two days earlier, the company’s residential sale, which took place at The Cumberland Hotel in central London, featured 226 lots, including plenty of attractive property investment opportunities, with 184 lots selling under the hammer - 82% sales success - for a combined £72.5m.
The residential auction comprised of a number of high-quality, good value and well-located properties across all parts of the UK and Ireland, including plenty of strong investment opportunities in prime central locations. The average lot size was over £410,000.
Gary Murphy, partner at Allsop, said: “With two weeks to the election and a general softening of success rates across the auction industry, careful management of sales prior and close attention to pricing on the day was critical to the outcome of our May sale.
“The room responded very well and, from the start, bidding was enthusiastic across a broad selection values and locations. It just felt a little easier than our March sale. There’s still a strong appetite for residential property – but it remains price sensitive.
“While there was interest from owner occupiers, Murphy said that there was “particular interest” from developers and investors. And, despite concerns that central London property values are correcting, he added that the firm “had some strong successes in the capital”.
Strettons raised almost £13.5m, including post-auction sales, on the back of an 88% success rate in April in what was the firm’s third auction of the year.
The sale, which was held at the Grand Connaught Rooms in central London, saw 42 of the 48 lots offered, sold under the hammer, including of a freehold pair of semi-detached houses and land with development potential in Ilford, Essex, which sold for £1.5m.
Also attracting the interest of developers was a freehold vacant site with planning permission for five houses in Dagenham which sold for £720,000.
Despite the 3% stamp duty on additional homes and the changes to landlord’s mortgage tax relief, the hammer came down on a number of residential properties which were acquired by buy-to-let investors, with an average gross yield of about 4.5% for residential properties.
Philip Waterfield, Strettons director, said: “Our May sale marked 80 years since our first auction in 1937 and I am delighted that we have celebrated that with our highest total of 2017.
“I am also pleased that we have beaten the average success rate for London auction houses for our second auction in a row.”
The UK property auction market saw very little change in terms of overall performance in June, despite the fact that only 126 auctions were held across the UK last month, 18 fewer than the corresponding month last year.
The number of lots offered increased by just one instruction, to 2,663 lots, whilst there were 14 fewer lots sold - down 0.7% to 1,947 lots. The total amount raised fell 3.7% to £267m, down £10m from June 2016.
The rolling quarterly and yearly figures show small falls in lots offered, lots sold and the amount raised, but sale rates remain consistently healthy at around 76% indicating that demand remains high for keenly priced lots.
EIG’s David Sandeman said: “The residential market saw a small increase in lots offered last month, up 1.5% to 2,317 lots, whilst lots sold fell by 0.6% to 1,684 lots. The rolling quarterly figures show minor fluctuations, but overall the sector's recent results have been largely comparable to those recorded last year.
He added: “One contributing factor could have been the furore surrounding the general election; from the unexpected announcement in April through to the extraordinary conclusion of a hung parliament on June 9th. Now the dust has settled one hopes that the market strengthens again through the second half of the year.”
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Andrews & Robertson
Despite being held just two days before the general election, buyers were undeterred by political uncertainty as Andrews & Robertson raised more than £11m on the back of the 118 lots on offer, with a 75% success rate from their June sale, held at The Montcalm Hotel in Marble Arch.
The highest value lot, a freehold former vicarage on a substantial corner site with planning permission for the construction of seven houses in Pollards Hill, Norbury, SW16m, proved extremely popular and exceeded its £1.85m guide, selling for £2.08m.
Other highlights of the sale included a semi-detached house arranged as two self-contained maisonette, which was sold on behalf of the London Borough of Southwark for £1m, a corner building in Camberwell which is arranged as a first and second floor maisonette and ground floor restaurant, producing £37,200 a year in rental income, which sold for £800,000, while a two-bedroom house on Hardy Road in Wimbledon was sold for £630,000.
Speaking after the auction, Andrews & Robertson Chairman and Principal Auctioneer, Robin Cripp said: “In an ideal world we would not have held an auction some two days before a general election. The property market, like most markets, does not like uncertainty and with the latest polls showing that the gap between Labour and the Conservatives has narrowed, this is a week of great uncertainty.
“However, we deal with the cards we have been given and as always there were plenty of savvy investors in the room to snap up the lots with development potential.”
Clive Emson Auctioneers sold land and property worth more than £20m at its five-part June auction.
The firm catalogued 143 lots and achieved a sale rate of 82%.
June highlights from the firm, which works with 850 high street estate agents across southern England, included a timber framed holiday property on stilts at North Fambridge, Essex, which can be accessed on foot only when the River Crouch tide is low. The lot sold for £41,000 freehold.
Elsewhere, a partially-converted barn on 13.23 acres in Kenardington, near Ashford in Kent, went under the hammer for £420,000 freehold, while a former bank in Selsey, West Sussex, with planning consent for residential/commercial conversion went for £170,000 after strong saleroom interest.
The firm’s managing director, James Emson, said: “There may be a lot of uncertainty in the world at present, but one certainty remains – there is security in bricks and mortar.
“Despite a political situation that seems to change every day, and one which offers little indication of how things will play out for the property industry as a whole, we go about our business as usual.
“Indeed, our packed June salerooms have demonstrated the continuing trend set so far in 2017 – that both buyers and sellers realise they get exceptional value and service from Clive Emson land and property auctions.”
The company’s second property auction of the year saw 17 lots auctioned on Wednesday 21st June at its saleroom in Cambridge with a total realisation of over £2.5m.
With a sale rate of 76% and a number of lots achieving prices well over their guides, it was a good indicator of the continued confidence in the East Anglian property market, according the Ian Kitson, director, Cheffins.
For city centre property, 8 Radegund Road in Cambridge, a substantial semi-detached property with five bedrooms, achieved £655,000, £155,000 over its original guide price of £500,000. Similarly, a third floor apartment with two bedrooms in Chesterton, Cambridge, sold for £220,000, achieving £50,000 over its guide price of £170,000. Both properties were sold to end-users.
A two-bedroom detached cottage with a large mature garden in the rural village of Helions Bumpstead on the Cambridgeshire/Suffolk/Essex borders sold for £200,000 to an owner-occupier and achieved £50,000 over its original guide price.
A village hall in Kentford, near Newmarket, which was built in the 1890’s was sold to a local buyer for £330,000, following competitive bidding from a number of parties. The building has outline planning permission for demolition and to be replaced by two, three-bedroom detached houses on the 0.3 acre site.
Ian Kitson commented: “June’s auction goes to show that the East Anglian residential property market continues to achieve strong prices and attract a mix of developers, investors and end-users.
“Whilst the result of the general election and the start of Brexit negotiations have created uncertainty in many of the UK’s markets, the strength of Cambridge and the surrounding area has helped demand and pricing continue to stay strong across the board.
“We saw buoyant bidding, with optimistic buyers and enthusiasm in the room which illustrated perseverance in the region’s growth. Developers looked to snap up options for residential development sites, whilst end-users are continually turning to the auction room to pick up cottages and family homes.
*Marc Da Silva is Estate Agent Today and Letting Agent Today Features Editor. You can follow him on Twitter @propertyjourno